Relationship marketing in an international context: a literature review

International Business Review 12 (2003) 193–214 www.elsevier.com/locate/ibusrev

Relationship marketing in an international context: a literature review Saeed Samiee a,∗, Peter G.P. Walters b a

College of Business Administration, The University of Tulsa, 600 South College Avenue, Tulsa, OK 74104-3189, USA b Hong Kong Polytechnic University, Kowloon, Hong Kong Received 1 March 2002; received in revised form 1 May 2002; accepted 1 July 2002

Abstract This study identifies and examines the extant literature in international relationship marketing. Twenty-four empirical studies that address various aspects of relationship marketing are identified. However, only eight studies were found to explore marketing relationships across national boundaries. The remainder combine multi-country data or examine relationship marketing in non-US settings. In this review, we report the nature and the findings of these studies and discuss their implications for future research and marketing practice. It is apparent from this review that, despite the increasing importance of international marketing, insufficient attention is being paid to exploring and theorizing relationship marketing in international contexts. Furthermore, limited effort in validating domestic findings in international settings circumscribes the universal applicability and managerial relevance of relationship marketing studies.  2003 Elsevier Science Ltd. All rights reserved.

1. Introduction Interest in the impact of buyer–seller relationships in business markets has increased significantly over the last decade. This interest reflects the importance of distribution in the value chain and wide acceptance of the relevance of social networks and personal relationships for many exchange transactions (Dwyer, Schurr, & Oh, 1987). As a consequence, frameworks and paradigms emphasizing the signifi-

∗

Corresponding author. Tel.: +1-918-631-2019; fax: +1-918-631-2083. E-mail address: [email protected] (S. Samiee).

0969-5931/03/$ - see front matter  2003 Elsevier Science Ltd. All rights reserved. doi:10.1016/S0969-5931(02)00096-3

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cance of the development and management of relationships with channel members have attracted growing scholarly attention (Webster, 1992). Variously labeled as customer-orientation, relationship marketing, market-orientation, data-base marketing, and customization (Duncan & Moriarty, 1998; Cross & Smith, 1995; Day, 1994; Sheth & Parvatiyar, 1995a, 1995b; Webster, 1992), each approach is thought to offer a unique competitive advantage to firms (cf., Dertouzos, Lester, & Solow, 1989). Marketing scholars and practitioners have long recognized the importance of developing and nurturing relationships, particularly in distribution channels where relationships with suppliers (i.e., the upstream view) and customers (i.e., the downstream view) have been given a great deal of attention. Thus, despite the relatively recent emergence of the relationship marketing (RM) paradigm (Sheth & Parvatiyar, 1992, 1995a), marketers have always been keenly aware of the critical role of relationships and personal interactions, which have credibility both intuitively and pragmatically and are being applied increasingly in many contexts. However, the rate of conceptual development of new frameworks has tended to go faster than empirical testing and, not surprisingly, hard data on many aspects of RM is still lacking (Pressey & Mathews, 2000). In an international marketing context, relationships transcend national boundaries and key players in a given channel may be located anywhere in the world. Increased emphasis on globalization, cooperative strategies, and strategic alliances, coupled with the intensification of competition on a global scale, has led a growing number of firms to rethink their distribution strategies and to emphasize and seek to create greater mutual interdependence.1 As a result, channel relationships play an increasingly central role in the marketing strategies of many firms in both domestic and international markets (Heide & Stump, 1995; Johnston, Lewin & Spekman, 1999). Unlike relationships in domestic settings, those formed across national boundaries are affected to a much higher degree by diverse social, cultural, and other environmental factors which, in turn, can significantly modify the role and scope of relationships from one country or region to the next. Although the literature on RM has proliferated during the last two decades, only limited attention has been paid to international relationship marketing (IRM). A key goal in this study is thus to identify and review the extant empirical literature in IRM. Following on from this discussion, we seek to identify key issues deserving further scholarly attention and directions for future IRM research. In the sections that follow, we describe the governance of exchange relationships, the search process for our literature review, characteristics of the extant literature,

1 There is considerable evidence in the literature that supports these trends. See, for example, Buzzell and Ortmeyer (1995); Narus and Anderson (1996); McKenna (1995), and Johnston et al. (1999). Additionally, advances in telecommunications and computer technologies and the rapid expansion of electronic commerce have afforded an increasing number of firms the opportunity to internationalize the scope of relationships they pursue and maintain. Various technologies also permit ways of gathering customer intelligence to more precisely segment customers and to reach and to address their needs or to individualize offerings. However, the literature has not specifically assessed the relative impact of technology in developing and maintaining marketing relationships with customers and suppliers in markets abroad.

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IRM constructs, research methodologies and findings. Inasmuch as three streams of IRM research (upstream, downstream, and dyadic) are recognized, the findings are grouped accordingly.

2. Exchange relationship governance In order to better understand the genesis of the RM perspective, it is useful to review briefly the theoretical context for the governance of exchange transactions. In this regard, McNeil’s (1980) distinction between “discrete transactions” and “relational exchange” is of seminal importance. The former are exchange events which involve just the transfer of ownership between the parties concerned, and are normally of a “one-off”, short-term nature driven by the interaction of market forces. A relational exchange, on the other hand, is characterized by a context in which past, present, and future interaction between the parties concerned is of fundamental importance when seeking to understand the nature of exchange events. In the real world, the conditions for frictionless pure market mechanisms often do not exist, and many marketing transactions have important relational dimensions and cannot be classified as purely market driven “discrete” events. This is particularly the case when evaluating marketing activity in distribution channels, where many exchange events undertaken between channel members are often best evaluated as one of a sequence of transactions, with each being undertaken in a context where history and future expectations are key factors (Johnston et al., 1999). Non-market exchange events are not equally affected by relational factors. Reflecting this reality, Heide and Stump (1994) have suggested a governance typology where, in additional to market governance, two sub-groups—unilateral and bilateral forms—are delineated under the non-market governance category. Unilateral relationships involve a governance structure where one party is able to set the rules and impose their will in exchange relationships without having to seek compliance from other actors in the transaction. This category includes “internalized” business transactions and many non-equity contractual relationships such as licensing. In the case of “bilateral” relationships, the actors in exchange events are committed to continuing relationships which involve neither a unified hierarchy nor necessarily comprehensive and detailed contractual obligations. This type of business relationship is driven by shared behavioral norms which allow for the adoption of a common normative framework for the regulation of exchange transactions, and patterns of business behavior where opportunistic motives are constrained because of the long term benefits of conforming to system norms and other social pressures (Dwyer et al., 1987). This is the realm of relationship marketing. Interestingly, scholars have not devoted much attention to the additional ramifications of undertaking RM across national boundaries. Clearly, this is an interesting and important issue and it is now relevant to consider the literature with a view to assessing what contributions have been made to understanding the dynamics and nature of international marketing relationships.

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3. Literature search The focus of this review is on internationally-oriented published empirical research within the RM paradigm. However, as noted earlier, academic interest in exploring a firm’s relationships with its customers and suppliers precedes the emergence of RM as a separate conceptual paradigm in marketing. Scholars have demonstrated interest in exploring the sociopolitical processes and outcomes (e.g., power and conflict) in distribution channels for decades (e.g., El Ansary & Stern, 1972; Stern & Reve, 1980). In addition, the network approach has received much attention, particularly from European scholars (e.g. the International Marketing and Purchasing Group), and the body of literature in this area has also grown significantly over the last two decades. For example, Ha˚ kansson (1982) edited a collection of case studies about “incremental [purchasing] commitment approach” of firms located in five European countries.2 An important feature of this contribution is the recognition that, while transactions take place between firms, individuals within them implement them. Thus, isolating a working definition for identifying relevant IRM articles for the present study posed a challenge. Given the wide range of possibilities for examining relationships within a marketing context, we used the presence of key constructs in the emerging RM research as a screening device for identifying the extant IRM literature. For example, trust, commitment, power, conflict, relationship age, information exchange and communications, relationship-specific investments, and performance are among the variables frequently discussed in the RM literature. Also, only research involving buyer-seller relationships was considered. The channel literature was also screened for relevant content that met our broad definition and addressed relational issues.3 As a result, several relevant articles from the 1980s are also included in this review. However, conceptual contributions, case studies, and studies relying exclusively on the network approach are not included in this review. To uncover the extant literature in these areas, we examined all published research dealing with distribution channels and RM using Infotrack and Ebsco electronic databases. Next, we closely examined the leading journals for their conceptual and empirical RM content. Reference sections of all relevant articles were examined for additional RM publications. All published RM articles were screened for having an international domain and an empirical approach. We used various search and library resources to access all publications we identified in this manner. Our search included all articles published before 2001. Overall, 24 empirical articles were identified which address RM in an international

2

The collection involved personal interviews with 316 firms by local academicians in France, Germany, Italy, Sweden, and the UK. However, only 23 detailed case studies were reported. 3 The volume of published work about distribution channels is significant. The main criterion used in selecting channel articles for inclusion in this study is whether the investigation shared dimensions that are deemed critical within the RM paradigm. For example, some articles in this field dealt largely with power and conflict rather than dimensions that enable the firm to better manage relationships. As such, these articles were excluded.

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context.4 Specifically, three groups of studies were identified. The first group consists of studies that examine marketing relationships with a supplier or customer in another country and constitute true international projects. To be classified into this group, it is not necessary for the data to be collected in two locations so long as the information gathered involves a relationship with a non-domestic entity. The next group are those that examine RM by combining data from several nations. These studies are labeled as multi-country because, in the research identified, the data sets were combined rather than cross-nationally compared. Finally, we also examined domestically-oriented RM studies that involved data from a single country. Strictly speaking, these studies are local in nature, however, they were included in this review because they can verify or refute existing RM knowledge in other cultural settings.

4. Results 4.1. Characteristics of the extant literature Although the RM paradigm did not emerge as a separate conceptual framework until the early 1990s, the earliest IRM study identified dates to 1982. The earlier studies do not fully incorporate some of the dimensions included in later work, but do focus on the relationship between the buyer and the seller. Thus, these earlier studies were also examining the nature of relationships and identifying factors that assist in developing a better understanding of channel issues and ensuing relationships. Publication outlets and dates are shown in Table 1. Few IRM articles were published prior to the 1990s but during the last decade, publication of empirical IRM articles has proliferated with 20 such studies published. In contrast, we uncovered only four relevant empirical articles published before 1990. The most common publication outlets were Journal of Marketing Research, European Journal of Marketing, and Journal of Marketing Management, each having published four studies; and Journal of Business Research and Industrial Marketing Management, with each publishing two studies. Surprisingly, some key outlets for channel research, such as Journal of Marketing, have published few IRM studies. It is also noteworthy that no IRM studies were reported in the Journal of Retailing and only one article has appeared in the Journal of Marketing Channels, even though these publications are presumably dedicated to channel-related issues. Two additional observations are noteworthy. First, one third of the articles are published in journals that are generally considered top-tier (i.e., Journal of Marketing and Journal of Marketing Research). Second, the IRM literature identified includes

4 The main determinant factor for the inclusion of a given article was whether it demonstrated a significant overlap in measures and coverage with contemporary studies centering on RM. Given the subjectivity of this rule, it is possible that some worthy articles might have been discarded. However, we are confident about the fair representation of the subset being examined.

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Table 1 Publication outlets 1980s Journal of Marketing Research Journal of Marketing Management European Journal of Marketing Journal of Marketing Industrial Marketing Management Journal of Business Research Journal of Global Marketing Journal of Marketing Channels Journal of Services Marketing The International Review of Retail, Distribution and Consumer Research Management International Review Totals

1990s+

Total

2 0 0 1 1 0 0 0 0 0

3 4 3 2 1 2 1 1 1 1

5 4 3 3 2 2 1 1 1 1

0 4

1 20

1 24

three cases where partially or entirely the same data were used in multiple studies.5 Interestingly, two of the three cases in which articles shared the same data set occurred in leading journals, and it is apparent that quality IRM articles are positively embraced by top marketing journals. As shown in Table 2, the majority of studies investigated channel relationships in domestic contexts (n=14, 58%). Only one third of the studies (n=8) employed international designs and gathered data about relationships with foreign suppliers or customers. This is somewhat surprising given the broad interest in international Table 2 Characteristics of publications Internationala

Foreignb

Multi-countryc

Total

Upstream Downstream Dyadic

3 5 0

9 1 4

1 1 0

13 7 4

Total

8

14

2

24

a b c

5

Studies involving relationships with customers or suppliers abroad. Studies involving non-US data. Studies involving data from multiple countries.

The six studies in question addressed somewhat different topics in each publication and the composition of authors varied in four of the six articles. The exception, Kumar, Scheer and Steenkamp (1995), combined the Dutch data with data gathered in US auto dealers for their 1998 study. Kale (1986) and Frazier, Gill and Kale (1989) relied on 51 observations from India. Finally, Brennan (1997) and Brennan and Turnbull (1999) also used data from the same set of 13 interviews.

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marketing, the straightforward nature of the data collection procedure for such studies, and that data collection in non-dyadic studies can be undertaken domestically. Finally, two studies relied on data from two or more countries; however, in each case the data were pooled for the purposes of hypothesis testing. Thus, no crosscultural IRM studies were identified. 4.2. Relationship direction The IRM literature consists of three groups of studies (i.e., upstream, downstream, and dyadic). The data appears to indicate that there are important differences in relationships as a result of directional factors. Upstream relationships are often asymmetrical because manufacturers and other upstream suppliers tend to be larger and more powerful (Kumar, Scheer & Steenkamp, 1995). This condition typically results in low levels of intrachannel trust, cooperation, and relationship stability (Anderson & Weitz, 1989; Dwyer et al., 1987). Scholarly effort has focused on developing a better understanding of these relationships and, not surprisingly, over one-half of IRM studies reviewed examine relationships between firms and their suppliers, i.e., upstream (n=13, 54%). Downstream relationships tend to exhibit rather different characteristics. Customers tend to be smaller than supplier firms (and presumably individually less important because firms tend to depend on many more customers than suppliers) which affords the latter significant potential power in the relationship. This is tempered by the fact that customers are the main source of revenue for suppliers which, in turn, implies that supplier firms need to manage relationships to maintain customer satisfaction and ensure relationship continuity. Despite this critically important issue, fewer studies investigated relationships between firms and their downstream customers (n=7, 29%). Given that businesses tend to be most concerned about understanding and enhancing conditions and relationships that directly affect revenues, the paucity of studies examining relationships with customers is surprising. The dichotomous nature of the upstream and downstream relationships maintained by a firm endorses the importance and the necessity of dyadic investigations of channel participants. However, even fewer IRM studies identified are dyadic in nature (n=4, 17%) involving data collection from both parties in relationships investigated. 4.3. Main constructs Although trust is the most common construct investigated in the IRM studies reviewed, its impact was not considered in most work. This is surprising given trust’s central role in the RM paradigm. Power was the second most frequently researched construct, followed by commitment, conflict, and relationship quality. Finally, reciprocity, investment in the relationship, and information exchange were employed in more than one study. It is thus evident that, to date, IRM studies share very few central constructs. It is noteworthy that only six IRM articles examined relationship performance outcomes, with the first study to incorporate performance not appearing before 1995.

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Given the critical importance of market and other outcomes, one would expect greater interest in performance variables in IRM studies. 4.4. Research issues The IRM literature has addressed a broad range of relationship issues. As shown in Table 3, there does not seem to be a convergence of topics, issues, or questions addressed in the extant research. Furthermore, although IRM studies overlapped to some extent with respect to constructs used, there has been little convergence in the methodological approaches pursued in exploring RM issues. Thus, in general, the constructs, measurement methods, and models used vary greatly across IRM studies, and no particular pattern or direction in the research pursued was discernible. Given that only 24 IRM studies were identified it is perhaps not surprising that there has been little convergence in the nature of the ongoing academic debate. Key IRM issues and questions investigated are classified by relationship direction in Table 3, and it is evident that the range of issues examined varies widely. There is also no particular pattern with respect to the relationship direction (upstream, downstream, or dyadic). 4.5. Methodology issues The majority of the 21 databases used in the 24 studies examined (see footnote #4) involved intermediary relationships with manufacturers or service providers (10/13 upstream, 5/7 downstream, and 2/4 dyadic). They involved a wide range of industries including ad agencies, auto, machine tool, food, petroleum, and telecommunications sectors. Four studies discuss intermediaries other than manufacturers or consumers. The remaining three studies were consumer-based (i.e., upstream), one of which dealt with consumer services. Only two (one consumer and one business) of the 13 studies involved an exchange of services. A large proportion of studies used non-random samples. Convenience sampling was used in eight studies (five upstream, one downstream, two dyadic—same data). Quota sampling was used in two studies (one upstream and one downstream). Although a few of the remaining 11 data sets involved the use of a random sampling approach, most sampling methods were conceptually or methodologically unclear and/or not specifically addressed. By their nature, dyadic studies required paired responses, making it difficult to retain random samples. For this reason, dyadic IRM studies involved smaller samples (13 ⬍ n ⬍ 105). The number of data points ranged from 11 dyadic relationships (i.e., 22 responses) to two-country samples involving 706 data points. All but two studies involved data from a single nation. The UK was the focus in seven publications. Germany, the Netherlands, Sweden, and the US were discussed in three publications each. Australia, Canada, France, Italy, New Zealand, and Norway were the sites of two studies each. Other countries studied included China, India, Japan, Indonesia, Ireland, Malaysia, Singapore, and Taiwan.

Dyadic

Reliability and validity of informant data in dyadic relationships Sales and marketing implications of suppliers relationships developed in the automotive and telecommunications industries Adaptive behavior in buyer–supplier relationships in the automotive and telecommunications industries Linkages between dependence and coercive strategies by The influence of trust, social investment, and The degree and congruence of partner the manufacturer intermediary relationship on export performance evaluations as key to trust and satisfaction to China in a guanxi context Sources of power within channels and intrachannel conflict Conflict in manufacturer–intermediary relationship in terms of dependency, resource commitment, and market knowledge Control, trust, commitment, and information sharing issues Asset-specificity, governance mechanisms, in developing relationships via data-base and direct relational investments, and relational norms as marketing predictors of relationship continuity Perception of distributive and procedural fairness on Inter-firm adaptation in relationships in terms of relationship quality reciprocity and dependency The influence of age, environmental uncertainty, and relationship outcome on relationship quality Channel interdependence asymmetry, punitive capabilities and actions, and reciprocity (continued on next page)

Downstream

The contribution of additional services to building closer relationships Use of information exchange, request, and recommendation Commitment explains the functioning of close strategies in a sellers’ market inter-firm relationships insofar as risks, governance mechanisms, and results are concerned Determinants of dealer dependence levels in a relational Relational exchanges are more appropriate in SE exchange in an LDC Asia than transactional ones

Power influence process in an LDC

Upstream

Table 3 Research areas

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The influence of long-term relationships on service use and trust Utilitarian value and reciprocal trust and legitimate image are positively related The influence of buyer–supplier relationship types on performance Balance of power, purchase involvement, professionalism, and personal contact influence the implementation of RM Buyer’s assessment of skills of suppliers and suppliers’ commitment, adaptability, perceived distance, and conflict Relationship between service quality, power, relationship strength Firm’s relationship to its network structure

Upstream

Table 3 (continued) Downstream

Dyadic

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5. Findings 5.1. Upstream studies Most IRM studies centered on firms’ relationships with their suppliers. As shown in Table 3 and Appendix A, a range of topics and constructs were investigated in these publications. However, seven constructs were shared in several upstream studies: customer service/relationship quality, involvement, commitment, trust, power, conflict, and information exchange. In general, the findings stress the importance of maintaining and demonstrating the presence of high quality relationships. Customer service quality was found to affect the perceived closeness of relationships with suppliers in international marketing channels (de Ruyter, Wetzels, & Lemmink, 1995). Additionally, greater perceived quality of buyer-supplier interactions increases commitment to the relationship and patronage (Grayson & Ambler, 1999). Kumar et al. (1995) found that relationship quality is related to perceived distributive and procedural fairness. They note further that the customer’s perception of fairness had a greater effect on relationship quality than the supplier’s view. However, given the upstream nature of the data, this finding is one-sided and needs to be verified through a dyadic design. The authors also reported that relationship quality is negatively impacted by environmental uncertainty. Chien and Moutinho (2000) and Pressey and Mathews (2000) reported that the level of involvement in relationships and information exchange are instrumental in developing and maintaining marketing relationships and for buying behavior and legitimacy. The IRM literature clearly points to the importance of commitment. Grayson and Ambler (1999) found that the higher the perceived quality of buyer–seller interactions and the greater the supplier’s involvement in the buyer’s marketing process the greater the commitment by the buyer to the relationship. Perceptions of a supplier’s commercial and technical competence is also associated with perceived supplier commitment to the relationship (Ford, 1984). Commitment has also been found to be reciprocal in nature with successful relationships relying on commitment from both parties (O’Malley, Patterson, & Evans, 1997). In the case of trust, the upstream studies found that it is associated with lower opportunism/loss of objectivity (Grayson & Ambler, 1999). The authors also report that trust is associated with rising expectations which, in turn, are associated with greater involvement, interaction, and commitment. Higher levels of reciprocal trust were found to be associated with customers’ perceptions of the utilitarian value of suppliers (Chien & Moutinho, 2000). Thus, customers seem to place greater value on relationships in which they perceive a high level of reciprocal trust. O’Malley et al. (1997) also found that, in consumer markets, trust is closely related to the notion of privacy in relationships. Elg and Johansson (1996) report the presence of conflict (or confrontation) between the firm’s original domestic relationships and the extended international network being incorporated into the system. Conflict decreases as the likelihood of using non-coercive sources of power increases (Ong, Elliott, & Armstrong, 1990). In sellers’ markets, perceived conflict is inversely related to manufacturer’s role per-

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formance (Frazier, Gill & Kale, 1989). The authors also found that conflict is inversely related to dealer dependence. Finally, conflict was found to be inversely related to buyers’ perception of suppliers’ commercial and technical skills (Ford, 1984). RM is apparently accommodated by a balance of power between the parties (Pressey & Mathews, 2000). The use of coercive power, on the other hand, has a negative impact on relationship strength (de Ruyter et al., 1995). Manufacturer power in a sellers’ market is positively related to the degree of pressure involved in the use of influence strategies to alter a dealer’s behavior and the less powerful suppliers are perceived to use low pressure means of influencing the buyer such as information exchange, requests, and recommendations (Kale, 1986). 5.2. Downstream studies Seven IRM studies focused on relationships with customers; with two centered on relationships with customers in Southeast Asian nations. Both of these studies demonstrate that a relationship marketing context facilitates business activities and enhances business performance. Additionally, trust and commitment are shown to be central to relational success. Chadee and Zhang (2000) examined the impact of guanxi for New Zealand firms exporting to China. Their findings indicate that intermediaries have no influence in locating and selecting Chinese business partners for New Zealand exporters. This is a potentially important finding because other studies have demonstrated that foreign investors frequently employ intermediaries to identify suitable venture partners and other contacts in China (De Keijzer, 1992; Yeung & Tung, 1996). However, the authors stress the critical importance of developing mutual trust and guanxi connections with both business partners and government officials. Abramson and Ai (1998), on the other hand, examine Canadian exporters’ experiences in dealing with Chinese customers within transactional and relationship marketing contexts. Their results suggest that building networks of contacts, providing gifts, and performing favors were characteristics of both contexts. Gifts and favors did not have a positive effect on uncertainty or performance in transactional exchanges, but, in contrast, were positively associated with lower uncertainty and higher performance in longer-term, relational exchanges. So¨ llner (1999) addresses the varying nature of relationship development and maturity by demonstrating a null association between age and the stage of relationship development. Other downstream IRM research complements these findings. Experienced exporters who presumably maintain more longer-term relationships tend to have fewer channel conflicts (Sachdev, Bello, & Verhage, 1995). Greater relationship investments are positively associated with relationship duration (Haugland, 1999). However, asymmetric relationship-specific investments had no negative impact on relationship outcomes (Haugland, 1999). Unilateral adaptation in interfirm relationships is in part a function of imbalance in channel power and is partly due to a reciprocal demonstration of commitment and trust in relationships (Halle´ n, Johanson, & Mohamed, 1991). The authors contend that their model is reciprocal because the same constructs explain adaptation behavior in both nodes of a relationship, even though their data are downstream.

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5.3. Dyadic studies As reported in Table 2, a dyadic approach was identified in four IRM articles which were based on three data bases. All four studies were conducted in a domestic, non-US setting and, thus, none is a true investigation of IRM. As shown in Appendix A, the first study (i.e., John & Reve, 1982) is largely methodology-driven as the authors examined the ability of key informants at both ends of a relationship to provide valid and reliable data about each relationship. Using data gathered in Norway and SEM, the authors establish that, even though key informants from different firms within channel dyads are able to provide reliable and valid data about their relationships’ structural form, their views regarding four sentiment measures did not converge. Studies by Brennan (1997) and Brennan and Turnbull (1999) focused on 13 buyersupplier relationships in the telecommunications and automotive sectors in the UK. In the former research Brennan identifies a five-step process governing partner selection and identifies difficulties that may complicate relationship marketing. In the latter study, the authors examine motivations and decision making processes that underlie adaptive behavior in buyer-seller relationships. Their qualitative data reveal three managerial orientations, transactional, transitional, and partnering. Relationship marketing is firmly imbedded in the organizational setting and practice of the latter group. The authors observe a substantial level of supplier adaptation to customer needs and requirements in five out of nine of the supplier cases examined. In contrast, only two out of six buyer cases indicate a high level of buyer adaptation. This research offers support for the findings of Halle´ n, Johanson and Mohamed (1991) that buyer-seller adaptations in RM tend to enhance levels of trust and commitment. As the relationship grows through greater trust and commitment, further adaptive behavior should be expected, but relationship age is apparently unrelated to the level of adaptation. The results reported by Smith and Barclay (1997) in another dyadic study suggest that selling partners must invest time and effort in the relationship and demonstrate and reciprocate trusting behaviors which, in turn, enhance task performance. The mutual perception of trustworthiness is seen to be critical to mutually satisfying partnerships.

6. Discussion and implications for future research This review draws attention to several important issues in investigations concerning relationship marketing in an international context. An important problem and a major challenge posed by the RM paradigm is the broad, loosely defined nature of the domain. Relationships are complex phenomena which can be examined from a variety of perspectives in terms of theoretical frameworks, constructs, and methodology. When combined with firm-related factors and marketing strategy considerations, the range of topics and issues that might be explored increases exponentially. Not surprisingly, therefore, a major challenge to progressing scholarship in this field is posed by a general lack of convergence in the literature around key topics, plus the lack of a consensus on an appropriate theoretical framework and related constructs.

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The evidence indicates that relatively few RM studies have been undertaken from an international perspective. Our search resulted in only 24 studies of which only eight studies were truly international in that they dealt with relational exchange across national boundaries (Table 2). This is unfortunate given the centrality of relationships and relational exchange in marketing transactions, and although relationship marketing was identified as a new and important paradigm in the early 1990s, marketing relationships have been the subject of investigation by scholars for a very long time. It is striking that, despite greater academic interest in international aspects of business and marketing in academia since the early 1980s, marketing scholars have not been motivated to pursue more internationally-oriented RM studies. It is also apparent that no definitive empirically based conclusions can be derived from the RM studies reviewed in this paper. No clear pattern is apparent from diverse research findings and normative conclusions regarding managerial behavior do not emerge. In part this is because few scholars have replicated RM in diverse national settings. This fact, along with a lack of agreement regarding key constructs and theoretical frameworks, has inhibited the development of robust models which are meaningful in an international context. In addition, most IRM studies have not considered performance issues. This has meant that drawing normative conclusions for practitioners from the extant research is problematic. It follows from the preceding comments that there is much work remaining to be done by international marketing scholars interested in exploring IRM. In contrast to other areas in the international marketing literature such as exporting, country of origin, and international marketing strategy, the IRM literature is relatively impoverished. As noted earlier, the design and implementation of IRM studies are generally no more involved than exporting projects, and data can often be collected at home. Despite this, IRM has attracted little attention from most scholars. A lack of interest in IRM may be partly due to the complexity of the contextual situation (Johnston et al., 1999). Very importantly, the regulatory environment is complicated by political and legal factors that impact primarily on international business transactions. For example, protectionism and politics will affect trade and investment flows and associated marketing activity. As noted earlier, cultural diversity is also an important complicating factor. In a similar vein, national differences regarding economic, competitive, and political variables are likely to have significant implications for relationships, as are cross-national differences in management practice and style. The implications of the factors noted above need to be captured in IRM frameworks in order to better explain observed behavior. However, this does not seem to be happening to any great degree, with many IRM models being essentially the same as those utilized in a purely domestic setting. In particular, it is striking that cultural factors are not taken more explicitly into account in most of the IRM studies reviewed. In an international context, cultural diversity is a fact of life that can be expected to have important implications for the development and maintenance of buyer-seller relationships. Despite the relevance of the cultural context in international marketing, in most IRM studies cultural factors are conspicuously absent. This is understandable in single-country studies and the majority of the IRM studies (n=14) reviewed were of this type. In addition, certain RM measures (e.g., trust and

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commitment) naturally incorporate cultural dimensions. However, to our knowledge, these constructs have not been cross-culturally validated. Given that most IRM takes place in a multi-cultural setting, relevant cultural variables need to be creatively incorporated in research studies to more accurately and comprehensively gauge the dynamics of international marketing relationships. It is also interesting to observe that in the literature limited cognizance has been taken about the potential importance of the direction of the buyer–seller relationship. Thus, it has been noted that there has been a general assumption that “the factors driving distributor commitment are suggested to have the same effects on supplier commitment” (Kim, 2001, p. 87). This assumption may well be erroneous and there is gathering evidence of the need for a more refined view, where there is an explicit recognition that the factors driving relationships with suppliers may differ from those affecting relational exchange with customers (Kalafatis, 2002; Kim, 2001). To our knowledge, the RM literature has yet to examine the simultaneous view of upstream and downstream relationships using the firm as the unit of analysis. Dyadic IRM studies examine a relationship from the differing perspective of the two entities involved and thus allow for concurrent study of buyer and seller orientations and behavior. However, such work is more complex and expensive to undertake, which can explain why we uncovered no international dyadic studies in this review (Table 2). Such studies are especially valuable in shedding light on aspects of relationships that might go unnoticed when only one actor’s perceptions of a relationship are investigated. Inexpensive and convenient international communications can significantly reduce the costs of undertaking dyadic IRM projects and their pursuit should be encouraged. Complex distribution channels are common in international markets and channel intermediaries often play a more significant role than in domestic markets (Kalafatis, 2002). The activities of intermediaries in terms of their role developing relationships between suppliers and customers who know little about each other are worthy of more detailed investigation. The same comment also applies to the nature of these intermediaries’ relationships with their upstream and downstream clients. The impact and role of trust and commitment in establishing and maintaining marketing relationships is also an area worthy of greater attention. Such a focus aligns with the importance attached to these constructs in the RM literature (Morgan & Hunt, 1994). Key issues to examine include whether these constructs are precursors to or outcomes of international relational exchange, and their influence on performance in terms of market, profit, and satisfaction measures. Other areas where more research is needed include the impact of power and dependence upon IRM, strategies for successful integration of global distribution channels, and the nature and impact of communication on inter-cultural relational exchange. Frazier (1999) has already commented on a number of these issues in a domestic context. He also highlights a lack of research on resource allocation in global channels. Finally, much closer attention should be paid to success and failure in IRM, with a particular focus on describing the characteristics of successful relational exchange. This will allow for the development of normative guidelines that are relevant for international marketing managers.

F

F

I

UPS

Kale, 1986, JMR

Frazier, Gill, & UPS Kale, 1989, JM

Ong, Elliott, & UPS Armstrong, 1990, IRRDCR

Hallen, Johansson, & SeyedMohamed, 1991, JM

DNS

F

UPS

Ford, 1984, IMM

I

F

DY

John & Reve, 1982, JMR

Typeb

Dira

Study

Comments

Data from key informant from both sides of a set of wholesaler–retailer dyads demonstrate the structural validity of the model and that the measures have convergent and discriminant validity. The measures describe the structural form and collective sentiments within the dyadic interaction. However, the sentiments variables fail to show adequate validity. Part of the IMP project which has Examines the hypothesis that industrial purchasers’ assessments of their examined buyer–seller relationships suppliers are not based on views of suppliers’ technical and commercial between industrial companies. Based on skills in isolation. Instead they are closely associated with their assessment 196 interviews with marketing and of suppliers’ skills in developing a relationship with them. purchasing executives in Great Britain, France, Germany, Italy, and Sweden. Views of distributors regarding their A field study of channel relationships in India. Among the findings is that a relationships with tungsten carbide tool manufacturer’s perceived power is related positively to the frequency of use manufacturers in India. Sample size = of relatively high pressure influence strategies by its field representatives. 51. Views of distributors regarding their Develops a conceptual framework for channel relationships involving the relationships with tungsten carbide tool exchange of industrial products within sellers’ markets in developing manufacturers in India. Sample size = countries. Results are generally supportive of the conceptual framework and 51. illustrate the need to take the channel context into account in developing channel industry and perform empirical studies in a wide variety of channel settings. The data were collected from a mail Assesses the sources of power extant within petroleum distribution channels survey of all lessee and owner dealer and their contribution to intra-channel conflict. Results show a significant franchisees of two major oil companies inverse relationship between intra-channel conflict and the use of nonin the Perth metropolitan area. Sample coercive power by the two major oil companies. The findings indicate that size = 208. the use of coercive power is not an important predictor of intra-channel conflict. The data pertain to 237 business Social exchange theory and the resource-dependence model are used to relationships of industrial suppliers in present a structural model of interfirm adaptation. The model accounts for Germany, Sweden, and the UK with mutual adaptation as a consequence of trust-building as well as for customers in France, Germany, Italy, unilateral adaptation due to imbalanced dependence between the parties. Sweden, and the UK. The view that interfirm adaptations are elements in a social exchange process is supported. Continued

A cross-sectional study of wholesaler– retailer dyads in a small European country.

Characteristics

Appendix A. The IRM literature

208 S. Samiee, P.G.P. Walters / International Business Review 12 (2003) 193–214

Elg & UPS Johansson, 1996, EJM Brennan, 1997, DY JMM

I

de Ruyter, UPS Wetzels, & Lemmink, 1995, EJM Sachdev, DNS Bello, & Verhage, 1995, JMC

F

I

I

F

UPS

Kumar, Scheer, & Steenkamp, 1995, JMR

Typeb

Dira

Study

Data generated from 30 personal interviews with representatives of Swedish food firms. Case studies of buyer-supplier relationships of 13 matched-pairs of interviews with UK purchasing managers in auto and telecommunications fields and their marketing/sales counterparts in supply firms.

Worldwide importing intermediaries of a large, multinational Dutch manufacturer of fast-moving packaged consumer goods. Sample size = 117. Primary international intermediaries of Dutch manufacturers regarding export involvement and channel conflict. Sample size = 225.

Perceived supplier fairness in the auto industry. Sample consisting of 417 and 289 automobile dealers in the US and the Netherlands, respectively.

Characteristics

Appendix A. The IRM literature Continued

The current state of buyer/supplier partnering within the automotive and telecommunications industries is evaluated within the historical context. The key problem identified is the need to overcome antagonism of traditional relationships with suppliers. The costs and benefits of partnering approaches to both marketing and purchasing are discussed and implications for marketing managers seeking to develop partnerships with major customer organizations are outlined. Continued

Three major dimensions of export involvement: dependence on exporting, knowledge of foreign markets, and commitment of resources to exporting are explored. Results indicate that a manufacturer’s conflict with its principal international intermediary decreases with greater manufacturer dependence on the principal intermediary, increases as resources are committed to exporting, and decreases with the manufacturer’s foreign market knowledge. Focuses on inter-firm relationships and the internationalization of companies with special reference to the Swedish food sector.

Examines the role of supplier fairness in developing long-term relationships between relatively smaller, vulnerable resellers and larger, powerful suppliers. Authors conceptualize two components of fairness—distributive fairness and procedural fairness. Vulnerable resellers’ perceptions of both distributive and procedural fairness are shown to enhance their relationship quality, but these effects are moderated by the level of outcomes and environmental uncertainty. Explores the relationship between perceived service quality, supplier power base, and perceived relationship strength in international marketing channels.

Comments S. Samiee, P.G.P. Walters / International Business Review 12 (2003) 193–214 209

Dira

UPS

DY

UPS

DNS

Study

O’Malley, Patterson, & Evans, 1997, JMM

Smith & Barclay, 1997, JM

Kumar, Scheer, & Steenkamp, 1998, JMR

Abramson & Ai, 1998, MIR

I

F

F

F

Typeb Comments

Six phenomenological group discussions Identifies privacy issues which impact on the process of relationship were carried out in the UK. Consumers building. It suggests that what some consumers define as “intrusion” is discuss companies’ policies. what has been called “intimacy” by marketers. Nine propositions are presented which reflect the implications of current approaches to relationship marketing in consumer markets. The integral elements of meaningful relationships are absent or inhibited as a result of consumer concerns over intrusion of their privacy. Thus, marketers need to adapt their attitudes, behaviors, and processes in order to accommodate the participation of the consumer in the relationship. Canadian subsidiaries of two A trust-based model of effective selling partner relationships offered and multinationals in the computer industry. tested. Partial Least Squares analysis found that organizational differences Sample size consisting of 103 dyadic were modest predictors of three dimensions of mutual perceived relationships. trustworthiness, which in turn differentially affected three trusting behaviors. Trusting behaviors were found to have a somewhat greater effect on perceived task performance than on mutual satisfaction, whereas dimensions of trustworthiness had both direct and indirect effects on satisfaction. Dutch auto dealers’ punitive actions Dealers’ punitive actions toward their key suppliers are affected by their toward key suppliers as a function of perceptions of their own and their supplier’s interdependence and punitive perceived supplier interdependence. capabilities as well as by the supplier’s punitive actions. The authors test Sample size = 289, also used in the hypotheses based on bilateral deterrence, conflict spiral, and relative power 1995 study. theories, but none of these comprehensively explains the effects of both total power and power asymmetry. Interdependence asymmetry has no direct effect on punitive actions, whereas punitive capability asymmetry does. Dealers with a relative advantage in dependence or punitive capability are more likely to reciprocate their supplier’s punitive actions. Canadian companies doing business in Buyer–seller relationships in Southeast Asia’s relationship marketing-style the S.E. Asian markets of Singapore, are based on trust, mutual benefits, shared goals, and a harmonious Malaysia and Indonesia. Sample size = approach to handling disagreements were strongly related to reduced levels 103, combining both home and host of received environmental uncertainty and a variety of improved market offices of Canadian suppliers. performance outcomes compared with the use of more opportunistic transactional relationships. Continued

Characteristics

Appendix A. The IRM literature Continued

210 S. Samiee, P.G.P. Walters / International Business Review 12 (2003) 193–214

I

MC

DNS

So¨ llner, 1999, JBR

Haugland, 1999, DNS JBR

Alexander & Colgate, 2000, EJM

DNS

F

UPS

Grayson & Ambler, 1999, JMR,

F

F

DY

Brennan & Turnbull, 1999

Typeb

Dira

Study Confirmatory evidence is described supporting earlier arguments that the concepts of power and social exchange in relationships are important drivers of adaptive behavior. These factors are not exhaustive and the strategic marketing orientation of the partners to a relationship is also relevant.

Comments

Replicates and extends the work of Moorman, Zaltman, and Deshpande (1993). Results confirm seven of ten hypotheses proposed in the original article that there is no hypothesized link between relational factors (such as clients’ trust in their service providers) and clients’ use of marketing services. It extends the original study by supporting the general hypothesis that long-term relationships have a negative impact on service use, which dampens the impact of trust. The results shed light on the mediating role that certain “dark side” constructs play in marketing services relationships. Asymmetrical commitment between The study claims that the construct of commitment can help explain the German sales engineers and service functioning of close interorganizational relationships with respect to risks, providers. Sample size = 94. governance mechanisms, and performance of relational exchange. Longitudinal data were obtained from Focuses on factors influencing the duration of buyer–seller relationships. Norwegian exporters of salmon The results indicate that relational investments are positively associated with regarding their importers in the US and relationship duration; whereas, hierarchical governance mechanisms are Japan. A sample of 11 firms reporting negatively associated with relationship duration. Furthermore, the results on 22 relationships; 12 relationships suggest that governance by relational norms is an important element in remained in 18 months. designing durable relationships. Presents the findings of a survey carried Identifies factors that influence the development of financial services within out among the financial directors of retail organizations. Considers the introduction of financial services within leading retail companies in Australia, the context of retailers’ relationships with their customers and retailers’ Ireland, New Zealand and the UK. ability to build closer relationships with existing and potential customers. Considers the opportunities which financial services provide for retailers more from a transactional to relationship approach to marketing. Continued

13 buyer–seller relationships were investigated, between 6 purchasing organizations and 9 supply companies. The fieldwork was conducted in the UK, with firms headquartered in Europe and North America. The study examines relationships between 200 advertising agency clients and their agencies in the United Kingdom.

Characteristics

Appendix A. The IRM literature Continued

S. Samiee, P.G.P. Walters / International Business Review 12 (2003) 193–214 211

I

Chadee & Zhang, 2000, JGM

b

a

F

Pressey & UPS Mathews, 2000, JSM

Comments

Selected PC purchasing behavior among Offers an explanation of relationship marketing through a conceptualization college students in Taiwan. Sample size grounded on a higher level metaphor, theorized from derived abstraction, = 240. and tested on empirical definition. Utility and projectability, reciprocity and legitimacy are analyzed in the context of relationship marketing. A survey of UK buyers in the Investigates the linkage between individual relationship structures and their engineering, electronics and performance. Four relationship structures were shown to have different telecommunications sectors. Buyers performance outcomes on the 20 dimensions of financial and non-financial were asked to report on their performance. Different types of long-term buyer–supplier relationships have relationship with a key supplier. Sample different performance outcomes. Each structure would appear to have a size = 200. discernible pattern of performance. Most notable was the broad range of performance possibilities of bilateral structures and the weak comparative performance of the dominant partner relationship structure. Consumer’s views of “high street” Focuses on potential difficulties in implementing a relationship marketing service providers. Sample size = 301. strategy. A number of attributes characterize the nature of the service and market structure are influential in an organization’s ability to implement relationship marketing: balance of power, level of involvement with the purchase, professionalism of the service provider, and level of personal contact. Seven dimensions of relationship marketing are evaluated in 4 service contexts (hairdresser/barber, optician, recreation center, and supermarket). Findings indicate that because of the influence of the 4 factors identified above, hairdressers, opticians, and recreation centers are more likely to operate in conditions that give greater support to the development of relationship marketing. Guanxi influences upon performance of Path analysis is used to assess the impacts of guanxi on export performance New Zealand firms exporting to China. of a sample of New Zealand firms exporting to China. The results show Sample size = 62. that guanxi variables significantly facilitate trade partnering, business negotiations and problem solving, and generally contributes positively to the overall export performance of firms.

Characteristics

DNS = downstream; DY = dyadic; UPS = upstream. F = Single-country, non-US data; I = data pertaining to relationships with non-domestic entities; MC = pooled multi-country data.

DNS

F

UPS

O’Toole & Donaldson, 2000, JMM

F

UPS

Chien & Moutinho, 2000, JMM

Typeb

Dira

Study

Appendix A. The IRM literature Continued

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